As a former Executive Director of the World Bank I know that the columnists of the Financial Times have more voice than what I ever had, and therefore they might need some checks-and-balances.
Currently, having probably trampled some delicate ego, I am a persona non grata at FT.
Would the child shouting out “the Emperor is naked” have his observation published in FT? Would the child now need a PhD for that?

For more see "A Blog is Born" at the very bottom.

March 31, 2017

Sir, Mehreen Khan writes that in a report, carried out with the co-operation of ECB officials, Transparency International said the central bank’s “accountability framework is not appropriate for the far-reaching political decisions taken by the governing council”. “ECB executive questions role over banks” March 31.

Khan writes: “Yves Mersch, one of six executive board members, said the ECB’s new role as the Eurozone’s banking regulator, should be subject to greater scrutiny [especially since] “The Eurozone’s largest lenders are now subject to a watchdog called the single supervisory mechanism (SSM), established as an arm of the ECB”

The Chairman of the Group of Governors and Heads of Supervision (GHOS) of the Basel Committee for Banking Supervision (BCBS) is none other than Mario Draghi, the President of the European Central Bank (ECB). From 2009 till 2011 Draghi was the Chairman of the Financial Stability Board (FSB). In 2005 he was appointed Governor of the Bank of Italy and in April 2006 he was elected Chairman of the Financial Stability Forum, later FSB. In 1991 Draghi was named general director of the Italian Treasury, and held this office until 2001.During this time, he chaired the committee that revised Italian corporate and financial legislation and drafted the law that governs Italian financial markets. Between 2002 Draghi was vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005).

In this respect few would seem to have to know so much about current bank regulations as Mario Draghi. So one could presume he should be able to answer some very simple questions… unless of course he has no answers…

March 30, 2017

Sir, Sarah Gordon writes: “There is no doubt that a boost to investment in Europe is still needed. Its recovery since the financial crisis has been the weakest in 30 years, and most of the region’s economies are still underperforming their potential. The Juncker plan was an ambitious and imaginative attempt. But as for many such grands projets, implementation has lagged behind conception” “Juncker’s European investment plan: rhetoric vs reality” March 29.

But in parallel to that, the regulators, with their risk weighted capital requirements for banks, distorted the allocation of credit to the real economy.

By doubling down on risk perceptions they de facto decreed that those perceived as risky, like SMEs, were less worthy of bank credit than those perceived as safe, like sovereigns.

30 years from now there could be some roads where only driverless cars can travel, other in which only humans drive and some where both humans and driverless cars go. On which one will our grandchildren send their children to school?

As Kaminska hints at, the last one of these would probably be the one road “in which humans and autonomous vehicles will have to interact”.

But, for safety reasons, future parents will probably rather prefer to send their children on the driverless road, than trust the roads in which humans do their not always their best.

I would of course love for my descendants to keep their ability to drive cars. It is, or at least was such an enjoyment for me. But if I was nowadays told to take a horse drawn carriage down the road, I would not really know what to do, but I neither I nor humanity would suffer too much from me lacking that piece of know-how.

Sir, as I recently wrote to you I visited a museum in Sweden that impacted me, the Blekinge Museum, not because it was a museum of times gone by, it was a museum of my times gone by.

And much more dangerous than losing the ability to drive cars would, as I once also wrote you, be the “diminishing human fighting spirit” that the use of drones and robots could cause.

I ask: Could EU technocrats negotiate Brexit ignoring the will of EU citizens as to what Brexit should mean? In many ways it seems to me like some Brussels attorneys will be discussing the divorce papers without even consulting the divorcing parties.

I believe in EU, but I also believe EU is in serious troubles (not the least because of those bank regulations that doom its economies to stall and fall).

So, in the same vein that much is spoken about what Brexit implies for Britain, too little really has been discussed on what Brexit really means to EU.

Here Wolf correctly writes: “The departure of the UK is also a tragedy for Europe. The UK has long been the standard-bearer for liberal economics and democratic politics… the effect of a brutal divorce on the EU would also be large.” But Wolf minimizes that by holding that “Britain would be the bigger loser, [so] UK must make concessions to ensure a harmonious and co-operative relationship in future.

I firmly believe Britain has in much been the glue that has held EU together. Therefore, if Britain, before or while negotiating Brexit, I would reach out to all Europeans with a message like:

“Our people have decided to part with EU, not because we dislike EU citizens, or the idea of EU, but in much because of the same reasons so many of you are not satisfied with EU. What do you want to see at the end of these Brexit negotiations? While negotiating should we also not engage in some type of marriage counseling? Who knows perhaps we find something that could make us all live better and happier in or outside EU. Like perhaps forcing those technocrats in Brussels to use a CPAP so that they snore less. One fact though is that Britain cannot move to Australia, and so no matter what we do we will still be neighbors. Would really you and us want to see grumpy faces over the fence all day long?”

Sir, you write: In 1986, New York’s parks department had failed to rebuild the Central Park ice skating rink, despite spending $13m and six years on it. Mr Trump offered to get the job done for $3m. The mayor accepted. The project was completed in six months and under budget” “Why business cannot make government great” March 29.

So, if the building of the ice-skating rink were financed, the public sector would have needed way over $13m in finance to build the Central Park ice-skating rink, and the private sector perhaps less than $3m.

And yet, regulators, when deciding how much capital banks need to hold, those $13m of the public sector, if financed by banks, would be assigned a 0% risk weight while, if $3m was lent to the not-credit rated private sector, that would have to carry a risk weight of 100%.

That would allow banks to leverage much more their equity with loans to the public sector than with loans to the private sector; which allows banks to earn higher expected risk adjusted returns on equity when lending to the public sector than when lending to the private sector; which translates into banks lending more to the public sector than to the private sector than what would have been the case in the absence of these regulations; which de facto means the regulators must think government bureaucrats are able to use bank credit more efficiently than the private sector.

Sir, since you have decided to keep mum on the extreme statist character of current bank regulations, it seems you opine the same.

You write: “Good government is efficient. It is also equitable and transparent and accountable to the broad electorate”. I ask, are the current discriminatory risk weighted capital requirements for banks that so much favor the sovereign “equitable and transparent and accountable to the broad electorate”? The answer must be a resounding NO!

March 28, 2017

Sir, Emma Dunkley reporting on BoE’s stress testing of banks writes: “The new “exploratory” test, which will be carried out every other year, will assess banks’ resilience to a wider range of risks beyond those emanating from the financial cycle — such as persistently low interest rates and high costs…The new assessment will include weak global growth, continuing low interest rates, falling world trade…”, “BoE set to raise the bar on resilience” March 28.

Again a stress test on how the banks might do because of the economy, but still with no regulator (or central banker) interested in stress testing how the economy might do, because of the banks.

When will a bank regulator ask whether banks are lending enough, and on sufficiently reasonable terms, to SMEs and entrepreneurs? The day he would respond that with a definite “NO!”, that day the regulator might begin to understand what damages his risk weighted capital requirements for banks cause the real economy.

PS. Emma Dunkley also writes: “Last year, UK banks had £19bn of impairments on credit cards, compared with £12bn on mortgages.” That might be… but does no one look at the risk premiums charged in both cases?

It reads like the sovereigns were totally disconnected from their subjects. Like if they are able to lock in low rates, this would not be paid by, for instance, those pension funds that will earn less?

And if sovereigns have some inside information that rates will shoot up, and still sells a long-term bond to a citizen (a bank or an insurance company) is that not stealing? Would a citizen not be fined and sent to jail if he did something like that?

Bank regulators decided for instance that banks and insurance companies need to hold less capital when lending to sovereigns than when lending to citizens. That of course leads to sovereigns being able to borrow at lower rates than what would have been the case in the absence of such regulatory favor. And who pays for that regulatory subsidy? The “risky” SMEs and entrepreneurs pay for it; by means of less and more expensive access to bank credit.

Sir there is such an amazing disconnect between the sovereigns and its subjects. It is as if the sovereigns have totally forgotten that their future is absolutely dependent on the future of its subjects. Or is it that current technocrats are just too statists or too dumb to understand what they are doing.

It does not help of course when influential papers like the Financial Times refuses to ask the questions that should be asked… like these:

It would be great if Lucy Kellaway would go thru FT’s code of conduct in order to explain to me whether it contains something that instructs FT’s journalists from not asking the regulators the questions that must be asked, in order to try to make some sense of what they are up to.

For instance: For their risk weighted capital requirements for banks the Basel Committee has assigned to the AAA to AA rated a risk weight of 20%, while for the below BB- rated one of 150%. Why on earth do they believe what’s below BB- rated and therefore made so innocuous, is more dangerous to the bank system than what’s AAA rated and which therefore could lead to the build up of really excessive and dangerous exposures?

That only guarantees that the safe will get too much credit against banks holding too little capital and the risky, those who are just as worthy borrowers, will get much less or much more expensive access to bank credit than usual. That is bad! That is why, when I saw something, I said something, in about 2.5k letters to FT.

But perhaps Lucy Kellaway must keep silent on this, since she includes in her own code of conduct, “Don’t do anything that you would be ashamed to tell your colleagues about.”

Sir, Michel Barnier writes “Severe disruption to air transport and long queues at the Channel port of Dover are just some of the many examples of the negative consequences of failing to reach a deal.” “Brussels will be transparent in Brexit negotiations” March 26.

Really? Are those really necessary consequences? Do Michel Barnier’s words really reflect what the citizens of the remaining EU feel about Brexit? Has he really been sufficiently authorized to negotiate? At what moment can the rest intervene if they don’t like where it’s all heading?

I ask because, as I have opined before, the truth is that EU has much more to lose from Brexit than Britain. Britain signified the most important glue to hold together such a diverse bunch of individualities of countries. In fact, without naming them, I know there are EU countries that harbor much more sympathies towards Britain than towards most of their associates.

Some years ago, I believe 2011, at the Brooking Institute in Washington, I heard the then EU’ Internal Market Commissioner Barnier quite aggressively lecture the US to do its part since WE "EU regulators will not accept a global regulatory race to the bottom"… When Barnier also made the point in his speech, also included in his handed out cv, that he was quite proficient in English, I clearly remember having thought (unfairly perhaps)… this guy has some sort of ego problem.

Of course, I could be totally wrong, I don’t know Mr Barnier, he could in fact be equanimity and friendliness impersonated. But, since in my TeaWithFT blog I also found having commented on an article by Alex Barker titled “Barnier vs the Brits”, November 9, I hope for the good of all parties, that the negotiations of Brexit does not take place in a coliseum with some gladiators just wanting to show off how strong they are.

PS. It was at that same Brooking conference that I was presented with a brochure in which the European Commission claimed as a great success that: “A French citizen complained about discriminatory entry fees for tourists to Romanian monasteries. The ticket price for non-Romanians was twice as high as that for Romanian citizens. As this policy was contrary to EU principles, the Romanian SOLVIT centre persuaded the church authorities to establish non-discriminatory entry fees for the monasteries. Solved within 9 weeks.”

Though I proudly carry a Polish passport, I have not really lived within the EU… and so I did not know what to think of it all. Is this what EU is about? If so, then Brexit would seem more reasonable.

@PerKurowski

March 25, 2017

Sir, Jeremy O’Brien writes: “The catch is the need to correct the inevitable errors experienced by qubits. Because quantum computers are prone to errors in ways that conventional computers are not, it is currently understood that to create a quantum computer with 100 logical qubits, we would need a system with about a million actual qubits.” “The future is quantum” March 25.

Our bank regulators created capital requirements based on ex ante perceived risks of assets, instead of on the risks that assets might pose for banks ex post. That is why they came up with risk-weights of only 20% for what is AAA rated, where there could be the buildup of dangerously excessive exposures, and 150% for the so innocuous below BB- rated.

Sir, I wonder how many qubits a scientist like Jeremy O’Brien believes we would have to install in the Basel Committee, or in the quantum computer controlled bank regulations we might have in the future, in order to avoid costly errors like that.

I guess it should not take too many… I guess IBM’s Watson would already not make such a mistake… as it would clearly start by asking: “what is the purpose of banks?” and what has caused major bank crisis in the past.

Harford is rightly skeptic and writes “In a data-driven world, it’s easy to fall back on a strategy of looking for marginal gains alone, avoiding the risky, unquantifiable research… I’m not so sure that the long shots will take care of themselves”

Of course, no one can doubt the benefits of any improvements, even if marginal. Using the term already implies that. Nonetheless the winners will still be those that, unafraid of risk-taking, produce the revolutionary steps forward, those which later can have all their juices extracted with marginal improvements.

Harford explains “The marginal gains philosophy tries to turn innovation into a predictable process: tweak your activities, gather data, embrace what works and repeat.” As that would clearly indicate a risk avoiding growth strategy, it could just be Haldane building up a defense of the current risk weighted capital requirements for banks; that which so much promotes refinancing the safer past, over lending to the riskier future.

Sir, would you like your grandchildren dream to become marginal improvers? Not me… that’s clearly insufficient… “aim for the stars even if you don’t reach them” goes a Chinese proverb.

@PerKurowski

March 24, 2017

Sir, Richard Waters writes: “a new layer of technology is being added to turn [big data] into the learning that makes applications more intelligent. It represents an emerging tech infrastructure that makes AI (artificial intelligence) not just a new application but a new approach to computing.” “Crowdsourced algorithms promise to be next big thing” March 24.

I register again, for the umpteenth time, the following comment:

Bank regulators, when they defined their risk weighted capital requirements for banks, which so much influences the allocation of bank credit to the real economy, looked at the risk of the assets, and not at the risk those assets posed to the bank system.

As a result they came up with that loony theory that what is perceived as very safe, is safer for the banking system that what is perceived as risky. That’s why they assigned only a 20% risk weight to what can be so dangerous as what is rated AAA to AA, and 150% to the so totally innocuous below BB-rated.

That caused a crisis because of excessive exposures to what was rated AAA; and low growth because of lack of exposures to what is perceived as risky, like to the 100% risk weighted SMEs and entreprenuers.

Sir, that is why all algorithms being developed should be required to carry a warning signed saying “Applying this to the wrong data, can be truly disastrous”

@PerKurowski

March 23, 2017

Everyone who know something about banking, and bankers, would know that what is perceived as risky never poses the same dangers to the banking system as what is ex ante believed as very safe but the ex post turns out to be risky. Even 17th century’s Voltaire, with his “May God defend me from my friends, I can defend myself from my enemies”, would understand that.

But the pillar of something as important as bank regulation, the risk weighted capital requirements for banks, is currently based on some fake news, fake input, namely on the fake theory that what is perceived as safe is safe for the banks, while what is perceived as risky, and which is therefore in reality quite innocuous, is what poses the real dangers to the banking system.

Sir, on this monstrous regulatory mistake; one with disastrous implications for the so vital allocation of credit to the real economy, I have written you and your journalists about 2.5 k letters over the last decade… but you have decided to ignore these.

That is why I do not feel too optimistic about it all when Roula Khalaf reports that “journalists from Le Monde, the French daily that has developed a readers’ tool to weed out fake news [have] started volunteering at schools, teaching teenagers how to distinguish between responsible journalism and fabricated news” “Journalists enter the classroom to root out fake news in France” March 23.

Khalaf also writes that Tom Boll, an instructor at Syracuse University’s Newhouse school of journalism “argues that a literacy effort that warns against falling for fake news should become part of a civics course and every citizen should take it.”

Sir, FT’s lack of response could be a very valuable case study in those civic courses. That because failing to denounce fake news, is just as bad as propagating these.

Or the title could alternatively be: “How can you not doubt bank regulators who believe that what’s perceived as risky is what is really risky to the banking system?

Sir, Claire Jones and Jim Brunsden report that “doubt still surrounds whether the new Frankfurt-based body, the Single Supervisory Mechanism, has done enough to tackle persistent failings in parts of the region’s banking sector” “Doubts grow over Eurozone banking supervisor’s performance” March 23.

I ask how can a “Single Supervisory Mechanism” be expected to perform its duties when they have to face the reality of banks being ruled by absolutely in-operant regulations, which they presumably cannot or dare not criticize openly?

March 22, 2017

Sir, I refer to Richard Milne’s discussion of how imposed investment limitations caused the Sovereign investor to miss out on billions of dollars over past decade, “Ethical stance crimps Norway oil fund” March 22.

The real question is: if Norwegians had been allowed to decide on their own per capita share of the net oil revenues, like for instance spending it now or picking their own investment advisors, would they have been better off or not? Long term, I believe they would.

What now exist are some millions of Norwegian expecting to be recipients of whatever the central managed oil revenues can provide them, without having had to take any responsibilities for it. By allowing a Fund to manage it all, Norwegian have missed a great learning opportunity, and have less idea about where all oil revenue came from, and where all oil revenues went.

If something goes wrong with the Fund, something that can always happen, they will show little understanding. Also, the sole existence of a huge amount of centralized savings is something that can attract the attention of dangerous redistribution profiteers/populists.

Sir, Martin Wolf writes: “China can help give Mr Trump what he wants. The US president wants greenfield industrial investments in parts of his country damaged by deindustrialisation. This can never be reversed. But Mr Xi can surely find Chinese businesses happy to invest in the US. Mr Trump likes such announcements. Mr Xi should help him.” “An odd couple doomed to co-operation” March 22.

What? Is the future wellbeing of America now beholden to China? Would Wolf really like this opinion of his to be quoted during a Trump rally?

If I were to give a recommendation of how to promote any type of greenfield investments in America, I would start with, of course, by telling America to get rid of those disastrous risk weighted capital requirements for banks that orders complacency with what we have, and de facto blocks bank lending to whatever smells as risky unknown future.

That regulatory risk aversion, which so odiously discriminates access to bank credit in favor of “the safe”, like the sovereign, the AAArisktocracy and residential housing; and so disfavoring the lending to risky SMEs and entrepreneurs… has no place in any country that wants to build future… much less in one that prides itself of being the Home of the Brave.

On March 14, Wolf discussed the horrors of bilateralism and the blessings of multilateralism, trade agreements and globalization, reminding us of oldies like the Marshall Plan, “The folly of bilateralism in global trade”.

Today it is China and America, with Wolf referencing the “reform and opening up” proposed in 1978 by Mao Zedong’s successor, Deng Xiaoping.

Sir, about a month ago I had the chance to visit a wonderful small regional museum in Sweden, the Blekinge Museum. It lies very close to my recently deceased mother’s family house, in which I spent a lot of time in my youth. It was a shocking and a humbling experience. It was not a museum of very old times gone by; it was a museum of so much of my (1950), (and Wolfs) times gone by.

Images of heavy horses pulling carriages full of hay, Olivetti accounting machines, telephone exchanges with hundred of cables, old bicycles, wrinkled by rough seas rowing boats, and hundred similar items that I have lived with, but that mostly no longer exists, and are much less used, shouted out… “Per, what on earth do you know about tomorrow… what does anyone know?”

Coming out of the museum, more than ever, I felt like praying “God make us daring”; or at least God make my children, grandchildren and their descendants daring, so that they are not among the so many to be left behind… doomed (by automation and robots) to end up like the heavy horses of my time. God let them live free of that complacency Tyler Cowen writes about in “The Complacent Class”… faraway from the high priests of complacency.

And as for me, and as for Martin Wolf, as economists, as citizens, as parents and grandparents, if we only look back, and do not do our utmost to imagine what lies around the corners of tomorrow then, like old soldiers (and heavy horses) we might perhaps better fade away.

Does all what we older have lived not mean anything for the young? Of course it should signify a lot… but much more in terms of wisdom, than in terms of knowledge.

@PerKurowski

March 20, 2017

Sir, Rana Foroohar writes: “America has a healthcare market that … has almost no price transparency… is controlled by vested interests (doctors, pharmaceutical and insurance companies) who exert monopoly power against the businesses and consumers they are supposed to service, and is highly fragmented and inefficient.” That results in “that healthcare in the US is the most expensive in the world by about 5 percentage points of gross domestic product” “Employers can help fix American health” March 20.

Foroohar quotes James C Capretta with: “The system would work a lot better if all of us could put pressure on doctors and insurance companies to provide more transparency.”

Absolutely. But I have argued that legislators could also provide much help by simply decreeing that, even though health sector suppliers are to be totally free to fix the prices for their services and products, they should not be allowed to use prices that discriminate excessively.

About a decade go I remember thinking: “If when needing medical services I could be sure being charged the same as my insurance company is, I could almost do without an insurance. What I really cannot do is to expose myself to being billed as an unprotected uninsured Per Kurowski.”

So it could be of great help the Health Transformation Alliance to which Foroohar refers, would, to their 4m employees, manage to add the representation of all the uninsured. That could signify much more for the American health sector than any of all other health and insurance plans being discussed in Congress.

About a decade go I remember thinking: “If when needing medical services I could be sure being charged the same as my insurance company is, I could almost do without an insurance. What I really cannot do is to expose myself to being billed as an unprotected uninsured Per Kurowski.”

Sir, in the health sector insurance companies is like the insured’s lawyers. But just like those who cannot afford lawyers are given legal assistance, the uninsured also need someone to defend them.

March 18, 2017

Sir, Tim Harford explains many reasons why a normal voter cannot be duly informed about all matters. Though that weakens democracy, it is a fact of life, and so he opines: “The workaround for voter ignorance is to delegate the details to expert technocrats.” “The man in Whitehall sometimes does know best” March 18.

I agree, except that I would have to add the caveat: As long as those technocrats operate transparently and can be openly questioned by any normal voter who happens to be interested in the subject.

And I say that out of experience. I consider the risk weighted capital requirements for banks that have come out of the Basel Committee to be about the most damaging and useless regulations ever; and I have a long list of questions that I have never been able to get a response to. Like for instance:

Why did the regulators not look at all empirical evidence that exists on what has caused all major bank crises? In that case they would not have assigned a risk weight of only 20% to what is so dangerous for the banking system as what is AAA rated, and one of 150% to the totally innocuous below BB- rated.

Why did the regulators not define the purpose of the banks before regulating these? In that case they would not have ignored the distortions in the allocation of bank credit this regulation causes?

Of course journalists, like those in the Financial Times, could play a vital role going between technocrats and voters… but what when they don’t want to do that for their own particular reasons?

Sir, Gillian Tett writes “most consumers have not fully considered the consequences of genetic profiling: is it a good idea, say, to discover through a genetic profile a vulnerability to Alzheimer’s? What will that mean for life insurance policies and data privacy?”, “The importance of socks in the genomic revolution” March 17.

Indeed, imagine if a full genomic sequence is obtainable at a really low price, what stops then insurance companies from offering two plans, one for those who want to present their full DNA result, and one for those who prefer to keep these confidential? What would the differences in premiums be?

In 2000, in the now extinct Daily Journal of Caracas, I wrote an Op-Ed titled “Human genetics made inhuman”. In it I tackled some of the problems to which Ms. Tett refers.

I ended that article with: “suggesting that all insurance companies design a plan which obligates them to issue policies for all of those who undertake a genetic examination. This policy should cover the negative impact and consequence that could arise from anyone getting access to such information.”

Would that suffice? Clearly not, but just the existence of such an insurance, and seeing the premiums charged, could be a smart way for us to allow the market indicate us what kind of social troubles we are getting into. This because clearly what we currently refer to the problems in health insurance with “pre-existing conditions”, would all be baby talk when compared to the societal impacts of genomic sequencing.

I worried about this in 2000, as others must have been worrying earlier, and here Gillian Tett brings it up in 2017. What has happened in this respect during that interval? Has someone somewhere been thinking on how to tackle this formidable societal challenge? Probably not! If so, why? Or is this just another question of those that should not be asked?

PS. In 2015, in a letter to FT, I asked: “What would Gillian Tett say if one of her health record entrepreneurs, by means of an innocent mistake, entered a data that for instance hindered one of her children to enter a university that had decided that the expected longevity of students was good for its funding drives?

March 17, 2017

Sir, Gillian Tett mentions that Hyun Song Shin, and economic adviser at the Bank for International Settlements, “believes that modern economists have a crucial blind spot: they tend to ignore how the financial system really works, since they operate with idealised models of money and investor incentives.” “A blind spot masks the crisis danger signs” March 17.

Of course! As I had written to FT, in thousands of letters, the risk weighted capital requirements for banks has completely distorted the allocation of credit.

That distortion has similarity to those found in a “BIS study of German life insurance companies, which have recently accounted for 40 per cent of government bond purchases, concluded these were gobbling bonds not due to deflation forecasts, or an enhanced appetite for risk… but because “accounting rules and solvency regulation” forced insurers to match assets to liabilities.”

But then Ms. Tett goes into writing of the “kinks in how these rules work (too complex to spell out here)… The result was a bizarre, self-reinforcing feedback loop that traders describe as “negative convexity” (and George Soros, the hedge fund manager, calls “reflexivity”). This sounds geeky.”

No Ms. Tett, it’s not geeky at all! It just requires simple 101 economics to understand that if banks are allowed to leverage more with some assets than with others, that is going to produce a complete different set of expected risk adjusted return on assets than those that would be present in the absence of such regulatory distortion... and of course willingness to think outside The Group.

For instance, if the sovereign has a zero percent risk weight, and an SME a 100% one, this means banks need to hold much less capital when lending to a sovereign than when lending to a bank. Ms. Tett, honestly, is it really geeky or should it not be quite simple to then understand that the sovereign is going to be favored more than he would ordinarily been favored, and that the SME will find it more difficult than usual to access bank credit?

Sir, day by day we are getting closer to some real fundamental problems, like:

Who sold the regulators that fake idea that what is perceived as safe is more dangerous to the bank system than what is perceived as risky.

Who were the regulators who believed such crap and did not even care about defining the purpose of banks before regulating these?

Where were all the economists (and journalists) that should have raised the question that needed to be raised?

Sir, with an insistence for which I am not ashamed to be called an obsessive, I have and still do my part. Are you doing yours?

Not a week goes by without at least one major financial media referring to Basel ratios that indicate banks are well capitalized. A responsible regulator should be out there answering such affirmations by reminding everyone that these ratios are; first not at all comparable with historic capital ratios based on non-weighted assets; and that they mean nothing if the risk weights are wrong. But the regulators don’t! They just play along.

And to state that those rated AAA, those who regulators assign a risk weight of 20%, are more dangerous to the bank system than those rated below BB-, those who regulators assigns a 150% risk weight to, is a mindboggling blatant lie, or a stupidity out of this world… have a pick!

Jenkins concludes among other with “More important still is that bank bosses themselves prioritise long-termist decency over short-termist profit-chasing”

Few things are more short-termist, or less long termist, than allowing banks to leverage more their equity, which means earning higher risk adjusted returns, with what is “safe”, usually the past and present, than with what is “risky”, usually the future.

Just think of it, a 35% risk weight on residential mortgages, and one of 100% for SMEs. That would seem to doom our young to have to live without jobs, forever in their parents’ basements… or, if there is a reverse mortgage on it, until the house is repossessed by the bank.

And Sir, if not directly lying, is not keeping mum on it at least sort of withholding the truth?

@PerKurowski

March 13, 2017

Sir, Lucy Kellaway no matter how she has educated her daughters in other aspects, something which I father of three might discuss, has all the right in the world to be very proud to have helped them “to spot bullshit at 50 paces” “How I help my children navigate their life journeys” March 13.

If she had taught the same to her finance expert colleagues in FT then they, upon seeing a risk weight of only 20% for what is so dangerous to the banking system as what is AAA rated, and one of 150% for the so innocuous below BB- rated, would have stated “What a BS!” and then the world could have looked quite less messier than now.

What kinds of easing? Because of the risk weighted capital requirements for banks, risk managers have lately been operating with one single mandate… namely that of reducing the capital needed, so as to help maximize the allowed leverage, so as to be able to produce truly large risk adjusted returns on equity.

In essence that has signified that banks, if compared to Volkswagen, have been able to control their own emissions, with the emission managers having been instructed to maximize these. Crazy? Yes!

So if the easing signifies the elimination of different capital requirements for banks, then risk managers could begin to serve a real purpose instead of a regulatory one.

Then SMEs and entrepreneurs would be able to compete on level ground for access to bank credit with sovereigns, AAA rated or residential mortgages, as they have been able to do during around 600 years, before the Basel Committee messed it all up for them.

But Sir, I am not sure that is the kind of regulatory easing banks are after.

@PerKurowski

March 12, 2017

Sir, Tim Harford discusses “agnotology”, a term coined by Robert Proctor, a historian at Stanford University, which refers to the study of how ignorance is deliberately produced. “The problem with FACTS”, March 10.

Harford writes: “Facts rarely stand up for themselves – they need someone to make us care about them, to make us curious… Mainstream journalists, too, are starting to embrace the idea that lies or errors should be prominently identified… [but] We journalists and policy wonks can’t force anyone to pay attention to the facts... Curiosity is the seed from which sensible democratic decisions can grow.”

Indeed but here follows two facts about which I have written to the Financial Times more than 2.500 letters over the last decade but that has not been able to raise its curiosity or perhaps belong to the group of the facts that shall not be checked.

First fact: Regulators, with their Basel II of 2004, for the purpose of setting capital requirements for banks, assigned a risk weight of 20% to what was rated AAA to AA and one of 150% to what carried a below BB-rating.

A below BB-rating ex ante indicates a very high risk, something which precisely make clients so rated to signify no risk at all for the banking system.

What is rated AAA to AA ex ante indicates a very low risk, something that precisely induces banks to generate those excessive exposures capable of causing a major crisis, if ex post it turns out to really be very risky.

Second fact: By allowing for different capital requirements, the regulators allow banks to leverage differently their capital with different assets. That produces expected risk adjusted returns on equity that are quite different from what would have been the case in the absence of such regulations; something which clearly must distort the allocation of bank credit to the real economy.

Harford mentions the presence of “motivated reasoning” distraction, and lies can help to cloud or even make impossible the understanding of truths. In the case of bank regulations and the 2007-08 crisis, two that stand out.

Motivated reasoning: we do not want banks to fail. Just the phrase “risk weighted capital requirements for banks”, if compared to “not risk weighted capital requirements for banks”, indicates something so much more prudent… and therefore likable. It is hard for most to understand that risk weighing can in essence mean nothing if the risk weights are wrong, as they sometimes are; and also that since the clearing for risks already occurs by means of sizes of exposures and risk premiums, the doubling down on the same perceptions, now in the capital, makes it impossible to adjust for risks… even if the risks are ex ante perfectly perceived.

Distraction: derivatives. Does it not sound so delightfully sophisticated when we speak of the dangers of derivatives? How can anyone dare questioning the expertise of someone capable of that?

A qualified lie: deregulation of banks. Banks were effectively somewhat deregulated with the repeal of the Glass-Steagall Act in 1998. But that “deregulation” was really insignificant when compared to the imposition of such intrusive and distortive regulation as the risk weighted capital requirements for banks. Never ever have banks been so miss-regulated as now.

Harford writes: “Agnotology has never been more important” “We live in a golden age of ignorance,” says Proctor today. “And Trump and Brexit are part of that.”. To this I would have to add, Bank Regulations!

So Mr Undercover Economist, and you too Sir, why not begin by some fact checking on your own fact avoidance.

PS: Harford quotes Molière “A learned fool is more foolish than an ignorant one.” George Orwell also wrote in “Notes on Nationalism”: “one has to belong to the intelligentsia to believe things like that: no ordinary man could be such a fool.”

And according to Edward Dolnick, Francis Fukuyama has heard Daniel Moynihan opining: “There are some mistakes it takes a Ph.D. to make”

@PerKurowski

March 11, 2017

Sir, Gillian Tett, referring to “Little House on the Prairie” and Tyler Cowen’s “The Complacent Class”, discusses that decline in the “mobility [which] was considered synonymous with the American dream”, “How America’s pioneering spirit disappeared” March 17.

Tett quotes Cowen with “What I find striking about contemporary America is how much we are slowing things down . . . and how much we are investing in stability”; and she concludes recommending: “the next time the Trump team talks about making America great again, maybe somebody should ask how to make America mobile again”

But are those who fled famine, religious or political persecutions, or simply the lack of jobs, all risk-takers? No! What was really important for making America great was that fresh opportunities, like land and bank credit, awaited those who, upon their arrival, were willing to put in the job and take the risks needed.

Sir, let me, for the umpteenth time, quote from John Kenneth Galbraith’s “Money: Whence it came where it went” 1975. “For the new parts of the country [USA’s West]… there was the right to create banks at will and therewith the notes and deposits that resulted from their loans…[if] the bank failed…someone was left holding the worthless notes… but some borrowers from this bank were now in business...[jobs created]”

So, if we are to talk about some diminishing risk-taking affecting the economy, and that blocks the pioneering spirit, then what most clearly stands out is the risk-weighted capital requirement for banks imposed by bank regulators.

Ms. Tett, can you imagine families arriving to a land governed by such like a Financial Stability Board, whose function is to keep banks from failing and do not care one iota about petty little things like banks allocating credit efficiently to the real economy? Would the Ingalls have thrived in such a land?

Is that really so? Could it not be that its government would then just waste the $20bn obtained now against the loss of future oil revenues; and that a future populist could easier come to power exploiting a re-nationalization platform? By the way, for how long is the extraction of a non-renewable natural resource be described as “production”

Sir, you know that Nigeria, like Venezuela, are oil cursed nations in which oil exports represent 90% or more of all the exports, and the revenues governments receive from oil 70% or more of all fiscal revenues. And yet you seem to indicate that with a correct recovery plan, which means centralized government bureaucrats still calling the shots, perhaps with somewhat less ammunition, there is “grounds for hope”.

Sir, if you were an oil-cursed citizen, I am sure you would not like a renowned international financial paper lending such support, to those powerful local oil bureaucrats, vulgar redistribution profiteers, that insist they should manage oil revenues, since they are much more experts and therefore know much better than you what good for you and your family.

Or is it perhaps that you are too beholden to all governments that do the oil-revenues spending?

Sir, Jo Ellison writes: In January, Jean-Luc Martinez, head of the Louvre, reported a decline of about 2m visitors to the glass pyramid on the Rue de Rivoli, and a loss in revenues of €9.7m. He blamed the attacks as being key… The hotel sector has seen a simple decline: many have reported occupancy rates plummeting by up to 40 per cent. “A night at the museum: Louis Vuitton goes to the Louvre, as Nicolas Ghesquière’s AW17 collection celebrates ‘brand Paris’” March 9.

I sat down with my daughter Alexandra, an art consultant with a M.A. from Christie's Education in Modern and Contemporary Art and the Market, to discuss Louvre’s really horrific decline in visitors. We came to the following (quite preliminary) conclusions.

First that it might be Louvre have catered too much to the tourist and in the process forgotten their nationals. There I suggested an invitation to Thomas Piketty and all his fellow countrymen to come and celebrate more often that great Monument to Inequality that The Museum of Louvre represents. (I am not entirely sure Alexandra was 100% with me on that one… perhaps only 99%
J )

Also, since the drop in hotel occupancy rates might have also to do with competition from Airbnb, it could result in tourists not feeling as tourists as usual and therefore not behaving as much as tourists, meaning among other, going less to museums. In order to combat this perhaps the Louvre must launch a campaign declaring anyone who has not taken a selfie at the Louvre as not really having been in Paris.

There are too many new challenges building up fast and on steroids, and those numbers Wolf so insistently feeds his readers with, might also risk chaining us to no longer valid economic realities or models.

How are we to best manage (and measure) the effect of all those salaries paid to humans that are disappearing because of robots and automation?

If we go for something like a Universal Basic Income, do we have the tools needed to measure their adequate levels? A correct dose UBI dose could be magical, but an excessive one, extremely poisonous.

What would happen to Britain and Italy, if their robots do not measure up in capacity to for instance Germany’s?

With risk weighted capital requirements for banks our most important risk takers are told not to take risks, while, without a blinking of an eye, we allow our young to take on debt to study what we all suspect will not generate them any repayment capacity.

Regulators allow a low 20% risk weight for what is so dangerous to banks as what’s rated AAA, while imposing a 150% risk weight on the so innocuous below BB-… and tenured economist or finance professors do not even question that.

Where are the societal debates on all these issues? For instance were there any mention of robots in the recent Brexit and US president election processes?

Martin Wolf, at least for a while forget numbers which importance might have been superseded by events. We need all men (good and bad) on deck.

Sir, I tell you, there will come day, you can bet on it, when a majority of Norwegians will opine “we would have been much better off managing each one of us his share of the net oil revenues, than handing these over to a sovereign wealth fund”. And they will be right.

How do I know? Well that’s how it goes when too few decide on so much wealth… it goes to their heads, and they start doing things for which they have never really been authorized, and then something happens, and then there is nothing to be done about it.

Do I mean that it was wrong of Norway to set up this fund? Not at all, I even wish Venezuela had done that… which it did… but

In 1974, as a recent young MBA, I became the diversification manager of the first Venezuelan Investment Fund set up to manage the nations fast growing oil revenues. It took me only two weeks to understand that it would not work, and so I resigned.

Norway was much further advanced than Venezuela when, in 1990, it set up its fund, and it has clearly done a lot better. Well-done Norway!

Nonetheless, the degenerative forces imbedded in such a fund are just too powerful, even for Scandinavians. The introduction of new objectives, without a clear explanation of what that could entail in reduced returns, is just one example of such forces.

Why do I make this point? Because in my Venezuela, again I hear the voices of those interested in its management, clamoring for something like the Norwegian Sovereign Wealth Fund. And Sir, I trust a thousand times more the citizens to know what to do with their share, than some few experts with everyone’s share.

In 2002-2004 I was an Executive Director at the World Bank (IFC) occupying the Chair that, among others, represents Honduras. In 2003, surely before Dinant and its late owner Miguel Facussé times, I have never heard about them, I visited some of those palm plantations in the Bajo Aguán region of Honduras.

In an Op-Ed I then wrote, I stated that I found these to be horrible, appalling; basically because to me it looked like that it “could be the mother of all poverty traps”, “ the borderline of lowest overall marginal cost, that is, where the least is paid to farmers for their labor”; and also because I always felt that “if we let globalization simply pursue the lowest marginal cost of labor, then Great Bad Deflation will inevitably come”.

But, as to the World Bank or the IFC “knowingly profiting from the financing of murder”? And of these being a detonator? “Lawyers lay out a build-up of violence before and after the IFC began lending to the company” I have to say no, no and no!

Could IFC, the World Bank, be lured into lending or investing in something that has something awful going on behind the curtains? Yes, that could happen to anyone.

Could some individual from IFC and the World Bank be involved in something criminal? Of course, but from there to launch this type of accusations against the institutions as such, only damages without serving any purpose. How much seed of suspicions can you seed before you do irremediable damage?

Also could it not be that someone is knowingly exploiting some poor suffering Honduran farmers, in an ambulance chasing type of action? I do not know EarthRights, and I have absolutely no reason to suspect anything but good intentions on their part, but profiteering happens, and so one needs to always proceed with utmost care.

I am no longer an ED, and since I am no longer capable, in my profession, of making one to my conscience honest living in my Venezuela… I now belong to a Civil Society (don’t ask me to explain precisely what that means). And as a member of it I do my best to generate constructive advice to valuable institutions such as the World Bank (and, disclaimer, absolutely not only because my wife works there).

Sir, let me get back to how I have titled this letter: The Basel Committee for Banking Supervision has made some mindboggling and very dangerous mistakes. FT has not shown a willingness to clearly echo my concerns or even ask bank regulators for some very basic explanations. But, “without fear and without favour”, you now allow this against the World Bank to be published. How come the differential treatment? Could not bad regulations be a murder weapon?

March 08, 2017

Sir, Martin Wolf writes: “The chances of a calamitous outcome, with poisonous long-term results, are high. Some of the more fanatical Brexiters would appear to desire this.” “Britain plays with fire over Brexit” March 8.

That’s true, but do not some fanatical Remainers seem to wish that too, so that they could later rub in all over our faces their “ See I told you so!”

Now Tony Blair argues, “If our government were conducting a negotiation which genuinely sought to advance our country’s interests, that negotiation would include the possibility of Britain staying in a reformed Europe”. Martin Wolf is also quite open to this idea, although he finds that “in practice, this option is highly implausible.

Plausible or not, I think the idea has a lot of merit, specially because at this particular junction it seems to me that EU has more to lose from Brexit than Britain.

So, if Britain I would ask EU, what would you like to offer for us to remain in EU? But, for that, Britain should know and spell out what that offer has to include, as a minimum. Does Britain know? Who knows, perhaps the Wish List would contain all that which EU also needs in order not to crumble on its own.

Besides, even if a Remain offer is not extended and the Brexit process follows its course, going this route has clear advantages. That because it would define Brexit not so much as a “We against you EU affair” but more a reaction to mutual problems; and that could only make life more amiable between partners discussing divorce terms… that is unless one partner does not want to see any difficulties divulged.

@PerKurowski

March 07, 2017

Given the fact that juicy/irrelevant or fake news/stories are usually so much more “interesting” for readers (like Harford and I) than many real fact based news/stories, Facebook’s Mark Zuckerberg clearly faces a tremendous conflict on interests. That of course because Facebook makes most (if not perhaps all of its income) when its users (like Harford and I) click on the ads attracted by these juicy/fake stories/news.

But is Harford someone to discuss this matters as an outsider? He writes in the Financial Times, and one of the greatest true financial real horror stories/news ever, must be about how bank regulators could get it so wrong so as to in Basel II assign a tiny 20% risk weight for what is so dangerous for the banking system, the AAA rated, and a huge 150% risk weight to the totally innocuous below BB- rated. But, has FT picked up on that? No!

Sir, is not withholding truths, for any reasons of your own, just as fake as fake news pushed for commercial, political or any other reasons of its own?

PS. Harford writes: “as a loyal FT columnist, I need hardly point out that the perfect newspaper is the one you’re reading right now”. That is an interesting point, which begs the question: Is columnists’ loyalty to their own newspaper something crucial for good journalism or good newspapers?

PS. Harford writes: “Reading the same newspaper every day is a filter bubble too.” Oops, careful there Tim, you are entering into the very delicate theme of groupthink and intellectual incest.

@PerKurowski

March 06, 2017

Sir, Lawrence Summers hits out at the possibility of taxing robots and writes: “Surely it would be better for society to instead enjoy the extra output and establish suitable taxes and transfers to protect displaced workers? It is hard to see why shrinking the pie, rather than enlarging it as much as possible and then redistributing, is the right way forward.”, “Leave robots tax-free to assemble a profitable future” March 6.

Right on... BUT! On the first: why should “less-fortunate workers” be displaced only because they are burdened with for instance payroll taxes or minimum wages, while robots are not, and so that their owner/bosses can earn more?

On the second: why should we have those robots that compete at the lower end of the labor market, be the main pie enlargers? If robots were taxed, then they would have to be much more efficient, and we would perhaps have a better chance of getting the 1st class robots we really want our grandchildren to have at their disposal.

I mean does Professor Summers really feel that the economy has been enlarged when, instead of being able to exchange some words at the supermarket with a human cashier, we have to settle with an automated cashier giving us instructions with an automated voice, and turning us into their submissive servants?

PS. Bill Gates, who is far from being the first to speak about taxing robots, wants us to use those revenues to enlarge the franchise value of the redistribution profiteers. Other of us want to use these instead to partially fund a Universal Basic Income, which could be part of the tools needed to create decent and worthy conditions, for all those unemployments robots and automation cause. But, last time I read it, Professor Summers was on the side of those considering we cannot afford a UBI plan.

PS. When Professor Summers writes, “Why pick on robots?” I am sure he knows we are not only picking on robots but on any artificial substitute for humans efforts that has been inhumanly favored.

PS. Are American workers really competing against Chinese and Mexican workers, or against American, Chinese and Mexican robots?

Foroohar writes: “small and medium-sized businesses create about 60 per cent of jobs in America.” And it is precisely to “risky” SMEs that bank regulators have assigned among the largest risk-weights; which mean banks need to hold the most capital when lending to these; which means they have dis-incentivized bank lending the most, to what we most need to have access to credit. It is all so loony, especially considering that major bank crisis never result from excessive lending to this type of client… since these are perceived as risky.

Foroohar also writes: “Carrier recently cut a deal with the president to keep 1,000 jobs in Indiana rather than moving them to Mexico, only to come under fire from unions for outsourcing hundreds of others and replacing workers with robots… Those who might in the past have worked $25 an hour factory jobs now do $11-$13 an hour shifts at Walmart.”

That should indicate that our society has been surprised, unprepared, for a major event, namely that immense structural unemployment that might result from the use of robots and other variants of automation. How should we handle it? Do we not need decent and worthy unemployments? Should we at least not tax robots and cousins with any type of taxes we load on the employed so that these latter could at least compete fairly for jobs? There are hundreds of questions waiting to be answered but in this data world, we don’t find any data on for instance how many jobs were effectively taken over by robots and cousins during the last decade.

Of course, as Foroohar says, “when it comes to trade Mr Trump is fighting the last war”. But the main reason for that is that no one informed Trump or the rest that there was a new war going on”. Did anyone mention the insane bank regulations war on risk-taking, the oxygen of development? Did Hillary Clinton and Bernie Sanders talk of the robots coming? Was a Universal Basic Income possibility raised in any town-hall meeting? Who told Trump and the electorate that the building the Mexico Wall could itself represent the last decent job opportunities for many, on both sides of the wall? Sir, clearly the world has a lot of urgent catching up to do.

@PerKurowski

March 03, 2017

Sir, Gillian Tett, horrorized at the possibility, writes “consider what might happen to credit guidelines and stress tests if the White House puts pro-finance, anti-deregulation officials into the four Fed governor positions that will come vacant in the next couple of years” “Trump’s stealthy deregulation delights business” March 3.

Yes what could happen? If Trump helps to squeeze in some regulators who know that what is perceived as safe is much more dangerous for the banking system than what is perceived as risky; and would therefore not assign those loony risk-weights of 20% to what is AAA to AA rated and 150% to what is rated below BB-, we could only be better off.

If Trump help squeeze in some regulators who do not possess such statist agenda so as to risk weigh the Sovereign at 0% and We the People at 100%, we could only be better off.

If Trump help squeeze in some regulators who, when stress-testing banks, are also interested in looking at what should have been on banks’ balance sheets and is not, like loans to SMEs and entrepreneurs, we could only be better off.

Sir, Ms. Tett, and you too, should ask yourselves whether regulators have performed adequately their fiduciary responsibilities of doing no harm? As I see it, they have caused a crisis, caused stagnation and helped to create greater inequality.

With failed regulators like these, there is nothing better than real de-regulation.

“Cash repatriation”? When will Ms. Tett, like most other discussants of this, understand that we really should not be talking about “cash repatriation”. All those exiled profits, or at least 99,99% of these, have already been deployed in assets different from cash under the mattress. These assets to be repatriated might indeed already have been repatriated, like if for instance they are held in bonds of the sovereign to which the repatriation takes place.

So, to refer to “cash repatriation”, can only feed the illusion that this would signify a fundamental way to correct for the world problems, like that of growing inequality. Under some circumstances, if the redistribution recipients exchange inefficiently those repatriated assets, it could in fact worsen some of our problems.

Sir, now why would some like to feed such “cash-repatriation-is-a-solution illusion? You tell me!

Does this mean that I am against the repatriation of assets booked abroad as a result of corporate profits? Of course not! If there is where these, by law or by incentives should go, that’s how it should be.

Me and my constituency!

Me and my constituency!

FT, just so that you know:

Some very few regulators thinking they were capable of managing the bank risks of the world, caused and are still causing immense sufferings, and you Sir are refusing to help holding them accountable for that.

My wicked question to FT

When do banks most need capital, when the risky turn out risky, or when the "not-risky" turn out risky? --- Yep, I think so too!

Videos: The Financial Crisis

My credentials

I have more credentials than most to speak out on the financial crisis and the subprime financial regulations having spoken out loudly about that since 1997...which could be embarrassing to “experts” with weak egos.

Most of those who think of themselves so broadminded when asking for “out of the box thinking” are so very narrow-minded they can only accept what comes, if that outside box lies “within their own small networks”.

Thank you, Martin Wolf

And on July 12 2012 Wolf also wrote that when "setting bank equity requirements, it is essential to recognise that so-called “risk-weighted” assets can and will be gamed by both banks and regulators. As Per Kurowski, a former executive director of the World Bank, reminds me regularly, crises occur when what was thought to be low risk turns out to be very high risk."

And that is something that I of course also appreciate, but that yet makes me curious on why Wolf does not follow up on it.

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Off-the-blog

One great perk I get from maintaining a blog like this is that it allows me to sustain many conversations with some great journalists who also need and wish to be kept “off-the-record” or as I call it “off-the-blog”.

Yet one wonders

Between January 2003 and September 2006, out of 138 letters to the editor that I sent to the Financial Times before I placed them on this blog they published these 15. Not bad! Thank you FT!

Unfortunately, since then and until the very last day of the decade, out of some 1.000 letters that you can find here, FT published none, zero, zilch. Of course FT is under no obligation whatsoever to publish any of my letters and of course one should not exclude the possibilities that my letters might have quite dramatically gone from bad to worse… yet one wonders.

My usual suspects are:

1. Someone in FT with a delicate ego feels his or her importance diminished by giving voice to a lowly non PhD from a developing country daring to opine on many issues of developed countries.

2. That FT has some sort of conflict of interest with the credit rating agencies that makes it hard for them to give too much relevance to someone who considers they have been given too much powers.

3. The FT establishment had perhaps decided there were only macro economic problems and not any financial regulation problems, and wanted to hear no monothematic contradictions on that.

4. That FT feels slightly embarrassed when someone repeatedly asks the emperor-is-naked type question of what is the purpose of the banks and realizing this was something FT should have itself asked a long time ago.

5. It is way too much oversight for FT to handle.

6. Or am I just supposed to be a living example of one half of the Financial Times motto, namely that of "without favour"Which one do you believe is closest to the truth?

A Blog is born

I like reading The Financial Times, or FT as it is known, and I frequently write letters to the editor and some of them that have indeed been kindly published, for which I feel thankful. But then I realized that all those letters to the editor that for reasons impossible for me to comprehend were never published, were condemned to an eternal silence not of their own fault, and so I decided to, at a marginal cost of zero, to resurrect them and keep them alive, right here.

English is not my mother language so bear with me and you’ll probably note when my letter has been published in FT by its correctness. Swedish is my mother language but I have not written anything serious in it for about 40 years and last time I tried, they just laughed their hearts out because of my démodés. Polish is my father language but, unfortunately, I do not speak a word of Polish, much less write it. Yes Spanish is my language, as I am from Venezuela and although I trust I write in it with great flair, I would still never dream of publishing an article in Spanish without having it edited by my wife.

And so friends here is my Tea with FT blog with my old and new letters to the editor. I hope you will share them with me now and again, and then again and again.

Welcome, and cheers, as I believe they say over there.

Per

PS. Just so that FT does not get too cocky and believe it is my only window to the world, I will now and again publish a letter sent to the editor of another publication.